Trade Compliance

“Proactive Free Trade” – A Possible Future Liberal Election Platform?

Posted November 12, 2014

Casting about for an “edgy and out-of-the-box” idea to differentiate the policy-challenged Liberal Party of Canada from its political rivals in next year’s federal election, National Post columnist William Watson has come up with a rather novel and highly intriguing proposal “consistent with the original philosophy of liberalism.” To that end, the former chair of McGill University’s Economics Department suggests that the Liberals adopt a policy of “unilateral free trade” that would eliminate all remaining tariffs in addition to as many non-tariff trade barriers as possible.
The proposal would, Watson estimates, cost between $4 and $5 billion per year in tariff revenues, a figure that he says is roughly equivalent to the family care and income-splitting schemes currently being floated by the other major parties as possible vote-winners. Unilateral free trade, which he believes could be more successfully marketed to the general public under the catchier name of “Proactive free trade,” would have the advantage of looking “smart, innovative, economically hip and forward-going, competitive and concerned with making the economy work better.”

Though Watson’s pitch might not have been issued with complete seriousness – he doesn’t think there’s much real chance the Liberals would actually go for it – the idea is also not as totally implausible as it may seem at first glance. Recognizing that “border barriers are bad for business” Watson notes that “dozens” of countries around the world have successfully implemented a similar free trade strategy in to order propel their economies “into productivity-boosting global value chains” and also points out that the concept has even been studied with some degree of interest by pro-business groups like the Canadian Council of Chief Executives.